Not only does the equation make hard-nosed sense in a public-health system, its use can reduce costs in other ways. Eager to gain NICE's approval, drug companies have started giving away portions of expensive treatment for free in Britain in order to ensure their drugs meet the threshold. Sir Michael Rawlins, chairman of NICE, believes that if the U.S. adopted a similar system, it would revolutionize the culture of major pharmaceutical companies, many of which spend more on marketing than research and development. A 2008 study in the New England Journal of Medicine predicted that incorporating information about cost-effectiveness into the design of U.S. insurance would save $368 billion over 10 years.

NICE approves over 90% of new drugs, and those it rejects are rarely life-saving. But it has turned down some expensive treatments that prolong life  most notoriously, the kidney cancer drug Sutent in 2008  angering patients and oncologists. The organization has since promised to approve more expensive life-saving drugs for illnesses affecting fewer than 7,000 patients a year. Rawlins concedes that NICE is "muddling through" uncharted waters: "The biggest lesson we've learned is to be open and transparent. But you have to be willing to make difficult decisions."

Aware that the idea of "rationing" health care would prove controversial in the U.S., advocates of reform  from the American College of Physicians to the advocacy group Center for Medicine in the Public Interest  have suggested a system of review that doesn't take into account the cost of new treatments. This would help doctors decide a course of treatment, as currently they have no way of comparing the efficacy of different drugs for the same condition. But it could also raise prices. "In a free-market economy the manufacturers may use the effectiveness review to charge higher prices for the best drug," says Jeffrey Harris, president of the American College of Physicians.

Peter Pitts of the Center for Medicine in the Public Interest says higher prices are a risk America will have to take. "Because NICE is concerned about saving money and not what's in the best interest of the patient, its methods are not only imprudent, they are unethical," he says, arguing that pharmaceutical firms use profits to fund research and development. Rawlins has a different take. "All health-care systems have implicitly, if not explicitly, adopted some form of cost control. In the U.S. you do it by not providing health care to some people. That's a rather brutal way of doing it."

In 2000 the World Health Organization (WHO) used statistical measures, such as life expectancy and infant mortality, to rank the world's health-care systems. France topped the rankings. In 2008, researchers at the London School of Hygiene and Tropical Medicine followed up the WHO study by showing that France is not only a good place to stay healthy, but also a good place to be sick: of 19 industrialized nations, France has the lowest number of "amenable deaths"  fatalities that could have been prevented by good health care. (The U.S. had the highest.)
But France is not immune to the challenges of modern health care. Despite massive government spending, its health-care system regularly runs over budget; in 2009 the deficit is expected to be $10.4 billion. Frustrated with the overstrained public-health sector, many people are now choosing private care. (See pictures of France.)

France's state-run health insurance scheme reimburses 60% to 70% of most medical bills. The remaining costs are assumed by the patient. More than 90% of French citizens pay for supplementary health insurance to cover these costs  mostly from state-run providers called mutuals. But those who can afford it are increasingly abandoning mutuals in favor of private insurance. For most ailments, that makes little difference: 80% of France's general practitioners work under a regime that caps how much they can charge. But the reverse is true for specialists and surgeons  80% of them set their own fees, often exceeding the reimbursement ceiling of most mutuals.

The result: a two-tiered system that runs counter to the utopian ideals of most health-care reformers. That's inevitable, says Dr. Roger Rua, secretary general of Syndicat des Médecins Libéraux, a union representing private practitioners. "Anywhere you've got a degree of socialization in a nation's health-care system, you'll eventually find people who feel they aren't finding what they want within it and decide to opt out," he says. "This is particularly true when systems begin having trouble financing themselves, and start cutting back on services."

Rua and others say that what's exemplary about France's system is that it has managed to foster patient choice while continuing to provide a generally high level of care for even the most vulnerable. All French citizens have affordable access to a doctor, thanks in part to one of the highest rates of doctors per capita in the world (3.4 per 1,000, compared to 2.4 in the U.S. and 2.5 in Britain). A sick French citizen who stays inside the public funding system might not get to choose from a list of specialists, but he or she will get a referral and the needed care. In some cases, patients even get paid to go to the doctor: for new mothers, a network of prenatal and early childhood facilities, called Protection Maternelle et Infantile, provides basic care, with financial incentives for the poor to attend.

France shows how a health-care system might realistically function in the face of daunting 21st century challenges: find a way to take care of your middle class and poor, and let the rich top up care as they see fit. As Rua puts it: "The [French] system ensures quality treatment for everyone, but it isn't there to eliminate the realities that exist in every country  and in every professional and economic sector  that give the more affluent a wider variety of choices, and the ability to seek élite care." With reporting by Bruce Crumley / Paris and Stephanie Kirchner / Berlin